Mittal Steel was today said to be preparing to increase its offer for Arcelor to more than £18bn to beat off rival interest from Russia.

The battle between the world’s two largest steel companies intensified today when Mittal Steel urged Arcelor shareholders to resist an alternative tie-up in Russia.

Shares in London took a hammering today with the biggest percentage fall since March 2003.

Following a positive start to trading the London market was back in the red today as profit taking at a number of blue chips and the threat of higher interest rates offset a recovery in the mining sector.

Strong gains by steel maker Corus were offset by a bout of profit taking as the FTSE 100 Index struggled for direction today.

The London market continued to hover below the 6000 barrier today despite merger speculation driving shares in steel-maker Corus higher.

The FTSE 100 Index slipped into the red today as it gave up early gains which had seen it power through the 6000 mark.

A flurry of takeover activity boosted optimism in London today as the FTSE 100 Index soared to levels not seen for more than four years.

British-based tycoon Lakshmi Mittal sought to extend his steel empire today with a dramatic £12.7bn (€18.5bn) move to merge the industry’s two biggest operators.

BRITISH-BASED tycoon Lakshmi Mittal announced a dip in profits for the world’s largest steelmaker yesterday after prices softened and raw material costs rose.

THE last owners of Irish Steel, who have refused to pay the clean-up costs of their former Irish site, are set to form the world’s largest steel company in a €14 billion deal.